Morning News: October 7, 2024
Posted by Eddy Elfenbein on October 7th, 2024 at 7:04 am

EU’s New Tariffs on Chinese Cars Turn Words Into Action

Goldman Says Surging Chinese Stocks May Advance Another 20%

Two Jumbo Cuts Were Too Much to Hope For

Bond Traders Buckle Up for ‘No Landing’ After Jobs Surprise

How to Think About the Surprising US Jobs Data

Trump’s Plans Could Increase U.S. Debt While Raising Costs for Most Americans

‘100%’ Yields Are Fueling a Retail Boom in New Quick-Buck ETFs

Costco’s Gold Bars Fly Off Shelves as Bullion Prices Smash Records

How to Win the Unfinished Fight Against Cost-of-Living Shocks

The Tech Lobbying Group Helping to Broaden the First Amendment’s Reach

How E-Commerce Is Making China’s Deflation Worse

Amazon RTO Edict Reflects Fear New Hires Don’t Know Company Culture

Want to Kill Grunt Work With AI? Careful What You Wish For

Apollo Global to Take Barnes Group Private in $3.6 Billion Deal

Workday Billionaire ‘Bored Silly’ of Retirement Chases a Third IPO

American Scientists Get Medicine Nobel for Finding MicroRNA

Activist Starboard Value Takes $1 Billion Stake in Pfizer

Astra Looks to Future of Cholesterol Drugs With $2 Billion Deal

How Cannabis and Opium Poppies Became National Security Issues

Chevron to Sell Oil Sands, Shale Assets for $6.5 Billion to Canadian Natural

Shell Expects Higher LNG Output But Flags Continued Refining Weakness

Cement Is a Big Polluter. A Plant in Norway Hopes to Clean It Up.

Libyan Oil Output Climbs Above 1 Million Barrels a Day

Saudi Arabia Said to Tee Up Multibillion-Dollar Bet on Hydrogen

From Cleveland to Chicago, NFL Teams Dream of Domed Stadiums

How Everyone Got Lost in Netflix’s Endless Library

Nutter Butter, Are You Good? An Investigation.

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Morning News: October 4, 2024
Posted by Eddy Elfenbein on October 4th, 2024 at 7:03 am

Is China Repeating Its 2014-15 Boom-Bust Cycle?

Japan PM Instructs Ministers to Compile Comprehensive Economic Package

A Big Russia Bet Is Minting Fortunes on Paper for Retail Investors

EU to Impose Tariffs Up to 45% on Chinese Electric Vehicles

Germany, France and Italy Urge the EU to Ease Banking Regulation

Trump-Proofing Europe Looks Impossible

Jobs and Oil Prices Are Keeping Markets on Edge

These Are Boom Times for ‘Degrowth’

US Money-Market Funds Hit All-Time High of $6.46 Trillion

Goldman Sachs Prodigy Finds It Hard to Crack the Hedge Fund Elite

Zuckerberg Passes Bezos to Become World’s Second-Richest Person

US Jobs Report Is Expected to Show Stable Growth in September

US Dockworkers Go Back to Work as Talks Extended to January

Pandemic Start-Ups Are Thriving, and Helping to Fuel the Economy

Retailers Have No Room for Error This Holiday

Britain Backs Plan to Store Carbon Dioxide Under the Sea

Southeast US Utilities Take Lessons From Houston to Temper Helene Backlash

‘Clean Steel’ Can Revive America’s Dying Rust Belt

Can a ‘Precision Scheduling’ Expert Fix Berkshire Hathaway’s Railroad?

Rivian Falls After Cutting EV Production Target on Supply Crunch

What Do US Vehicle Regulators Have Against Tiny Cars?

OpenAI’s Altman Concentrates Power on Path to $157 Billion Valuation

The Health Tech Boss Putting AI in Every Single Product

Hospitals Hit With IV Fluid Shortage After Hurricane Helene

CVS Is Under Pressure and Considering a Break Up. Here’s Why that Could Be Risky

Can a Neon Blue Gummy Worm Cocktail Save the Movies?

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Morning News: October 3, 2024
Posted by Eddy Elfenbein on October 3rd, 2024 at 7:09 am

Russian Court Freezes Funds of US Banks JP Morgan and Mellon

US Chips Guided Russian Missile That Killed 6-Year-Old Girl

Key Japan Ministers Show United Front With BOJ Amid Jitters

Buffett May Target Japan Bank and Insurance Shares, Analysts Say

World Braces for Bigger Trade Wars if Trump Wins

Is Biden’s Economy Overstimulated? Not Compared With Trump’s

Bill Dudley: How My Hard Economic Landing Forecast Went Wrong

Markets Need an October Surprise to Break Deadlock

Wall Street Races to Bring Private Credit to the Masses

Amundi Turns Bullish on Swiss Franc in Bet on Safe-Haven Appeal

Money-Market Funds Stay in Vogue Even as Reforms Go Into Effect

Banks Set to Use Swift for Token Transactions Starting in 2025

SEC Enforcement Director Who Pushed for Big Fines Steps Down

Warren Buffett Sells $338 Million of BofA Stock as Spree Slows

U.K. Home Sales Soar as Mortgage Rates Ease

US Office Market Shows Signs of Bottoming After Big Discount Sales

To Revive Manufacturing, How Much Can a President Do?

The Future of EV Charging Looks a Lot Like an Airport Lounge

Africa Oil Producers Raise Almost Half of the Seed Capital Needed for $5 Billion Energy Bank

Starbucks Buys Research Farms as Climate Change Threatens Coffee Supply

Navellier: What the Longshoremen’s Strike Is Really About – and Why It Matters

Striking Dockworkers Are Top Earners—When They Work

In Japan’s Countryside, Century-Old Firms Learn to Embrace Foreign Workers

Schools Make Millions Offering Degrees That Double as Work Visas

Japan’s Richest Person Donates $31 Million to UCLA Program

KLM Targets Savings, Explores Asset Sales to Counter High Costs

Beyoncé Released a Song and Levi’s Saw Its Moment

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Morning News: October 2, 2024
Posted by Eddy Elfenbein on October 2nd, 2024 at 7:23 am

The Economic Cost of a New War in the Middle East

Why the Conflict Between Iran and Israel Has Raised Oil Prices Only Modestly

Global Insurers Fight London Court Battle Over Jets ‘Lost’ in Russia

Don’t Let Geopolitics Derail Your Investment Plans

Poland Leaves Rates Steady Again as Inflation Accelerates

Japan Ministers Ask BOJ to Help Complete Exit from Deflation

Finance Firms More Worried About Global Economy, BoE Survey Finds

Hedge Funds That Bet Big on China Score 25%-Plus September Gains

The Supreme Court Tanked Its Reputation. This Is the Way Back

Dalio, Abu Dhabi Royal’s G42 Said to Shelve Investment Venture

Lazard, King of Emerging-Market Debt, Faces a New World Order

Elon Musk and Mark Cuban Agree on One Thing: Dogecoin Is No Longer a Joke

AI Can Only Do 5% of Jobs, Says MIT Economist Who Fears Crash

The Profane 78-Year-Old Leading the Dockworkers Strike

Adam Neumann’s Latest Project Is a WeWork Competitor

Vimeo Names New CMO as It Focuses on Business Video

How Hurricane Helene Jolted the Global Chip Industry

Chip Firms Monitoring Quartz Supplies After Hurricane Hits Mines

Toyota to Invest $500 Million in Air Taxi Startup Joby Aviation

Tesla Sales Increase, Suggesting Electric Car Demand Is Rebounding

Stellantis U.S. Auto Sales Extend Freefall in Third Quarter

Korea Zinc Teams Up With Bain Capital to Thwart Takeover Bid

Eli Lilly to Build $4.5 Billion Research and Manufacturing Center to Propel Drug Pipeline

Humana Shares Tumble as 2025 Membership for Its Top-Rated Medicare Plans Slump

Nike Needs to Tread in Adidas’ Footsteps

Starbucks New CEO Wastes No Time in Overhauling Executive Ranks

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CWS Market Review – October 1, 2024
Posted by Eddy Elfenbein on October 1st, 2024 at 6:22 pm

(This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

The Best Year for Stocks Since 1997

The stock market closed yesterday at another all-time high, 5,762.48. These new highs are getting repetitive! So much for September being the worst month of the year.

Through September, the S&P 500 is up 20.8% on the year. That’s better than every single major investment firm expected.

Yesterday was the index’s 43rd new high this year. This is the best first nine months to a year in 27 years. Also, this is the best start to a presidential election year on record (going back to 1928).

For the month, the S&P 500 gained just over 2%, and for the third quarter, the index gained 5.5%. This was the fourth quarterly gain in a row for the market.

What’s remarkable is how placid the stock market has been. Despite a flurry of scary headlines, the market keeps quietly chugging along. Except for a quick three-day panic in August, this market has been remarkably calm.

This has also been a tale of two markets. For the first half of the year, growth stocks strongly led value, but in the middle of the year, value started to take the lead.

In recent weeks, value’s surge against growth has started to wane, but I’m not ready to say the value cycle is over. As long as the Fed is committed to lowering interest rates, that’s good news for higher-yielding sectors of the market.

In particular, the areas of the market that are set to do well are defensive areas. By that, I mean staples, healthcare, utilities and REITs. There’s even been talk of “AI fatigue” plaguing some large-cap tech stocks. I wouldn’t be surprised to see more of that.

What’s been driving the recent rally? Obviously, the Fed rate cuts are playing a big role. Not only that, but it looks like more rate cuts are on the way. On Friday, we got good inflation news when the government said that the Personal Consumption Expenditures (PCE) price index rose by just 0.1% in August. That was less than expected.

Over the past 12 months, the PCE price index is up by 2.2% (see below). That’s the lowest 12-month rate since February 2021. I don’t want to say that inflation has been defeated, but the price outlook is getting better.

The PCE is important because it’s the Fed’s preferred measure of inflation. Unlike the CPI, the PCE is based on what consumers actually buy.

The core PCE, which excludes food and energy prices, also rose by 0.1% in August, and that was also below expectations. Over the last 12 months, the core PCE is running at 2.7%. That’s still above the Fed’s 2% target for inflation, but the trend is moving in the right direction.

The progress in August came despite continued pressure from housing-related costs, which increased 0.5% on the month for the largest move since January. Services prices overall rose 0.2% while goods declined by 0.2%.

We also learned that personal income rose by 0.2% in August, and spending rose by 0.2% as well. Both numbers were below expectations.

Since today is the first business day of the month, we got the ISM Manufacturing Index. For September, the ISM was 47.2. That’s the same as it was for August. That’s a weak number but nothing terrible. Wall Street had been expecting 47.5.

Tuesday’s report on job openings showed that there are eight million jobs looking to be filled. That’s an increase of 329,000 since July. The next test for the market will come on Friday with the September jobs report. Wall Street expects to see a gain of 150,000 net new jobs.

The Federal Reserve meets on November 6-7, and it’s very likely that the Fed will cut rates again. In fact, yesterday, Jerome Powell spoke at a conference in Nashville, and he said the Fed will keep lowering interest rates to help keep the economy going.

In the most recent projections, Fed members see the central bank cutting by 0.5% before the end of the year. Again, the rate cuts aren’t so much about the Fed helping a weak economy. Truthfully, the economy isn’t weak right now. Instead, it’s better seen as the Fed taking back its extraordinary rate hikes that were used to combat inflation. With inflation receded, so can interest rates recede. At least, that’s how the Fed sees it.

I am concerned about the dockworkers’ strike, especially if it drags on. That could cause disruptions and mess up supply lines. A strike is probably not strong enough to push the whole economy off the lines, but it will have an impact. We can’t say how great it will be right now.

Why Prices Are Better Than Reports

If you follow the government’s economic data long enough, you learn to greet each new report with a bit of skepticism. That’s because nearly every report will, at some point, be revised—and those revisions will, themselves, be revised. And those revisions will be revised yet again. In the realm of economic data, few things are as surprising as the past.

Just recently, the Labor Department conceded that it overcounted the number of jobs in the economy by 818,000. Well, that’s a sizable miss.

It doesn’t end there. Last week, the government said that it under-reported how well the economy recovered from Covid. Originally, the government said the economy grew in real terms by 5.1% from Q2 of 2020 through the end of last year. Now it says the economy grew by 5.5% over that time span. That small-sounding mistake is really a few hundred billion dollars.

The government originally reported negative growth for the first and second quarters of 2022. Some claimed that since it was two quarters of negative growth, that should count as a recession.

While two quarters of negative growth is a good shorthand for a recession, it’s not precisely correct. The official definition of a recession is much broader. In any event, it’s now a moot point since, thanks to the revisions, the government now says the economy grew slightly during Q2 of 2022. Change a few numbers and presto, no more recession.

The Bureau of Economic Analysis (BEA) also revised higher the U.S. savings rate. Previously, the BEA said the savings rate had dropped to 2.9%. That’s really low. Now they said it only got to 4.8%. Goldman Sachs said that number is probably still too low.

This is another reason why I trust prices more than the government reports. Sure, the market can be wrong. It’s wrong all the time. But at least the stock market never revises its old prices.

The Decade Cycle

We’re nearing the midpoint of the decade, and I was curious to see how the stock market performs, on average, each decade. I took all the data for the S&P 500 since 1957. That’s when the index expanded to 500 stocks.

Footnote: I started each decade on January 1 of each year ending in zero.

I found that the stock market performs much better during the latter half of the decade than it has in the first. In fact, during the first three years of each decade, the market has basically gone nowhere.

Even in this decade, the S&P 500 was sitting on an 11% gain for the decade as late as mid-October 2022. That’s a modest gain for nearly three years.

But that back half of each decade is a very different story. In five years, the stock market has gained, on average, more than 120%. Interestingly, the 1987 Crash is still clearly visible on this chart.

I’m not sure what could explain the difference. Maybe it’s a natural cycle? Or it’s a random draw? The Soviet economist Nikolai Kondratiev said there are 45- to 60-year cycles at play in the economy. Beats me. But I wouldn’t mind seeing the market double over the next 5¼ years.

That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Morning News: October 1, 2024
Posted by Eddy Elfenbein on October 1st, 2024 at 7:07 am

African Americans Granted Citizenship Rights in Former Slave Hub Benin

How China’s Copper King Dug Himself Into a $1.6 Billion Hole

U.S. Raises New Concerns Over Chinese Lending Practices

Eurozone Inflation Comes Below Target for First Time in Three Years

The Surprise Market Winner of 2024: The Great British Pound

Rattled Mexico Investors Seek Economic Clues as Sheinbaum Takes Office

Fed’s Powell Says Rate Cuts Can Sustain Soft Landing, but Sees No Need to Rush

Forecasting America’s Economic Future Under Harris vs. Trump

Harris, Trump Platforms Share Economic Nationalism

BlackRock’s Fink Says Market Is Wrong on Fed Rate-Cut Bets

This Hedge-Fund Manager Says It’s a ‘Max-Long’ Moment for Stocks

Why Private Equity Is In Such a Funk

Commerzbank’s Orlopp Says Strategy Is ‘Built on Independence’

Charles Schwab Names President Rick Wurster as Next CEO

Apollo Projects $10 Billion of Annual Earnings in Five Years

F.T.C. Clears Chevron’s Purchase of Hess With Board Condition

Microsoft Shares Lag as ‘AI Fatigue,’ High Multiple Curb Rebound

Strike Shuts Eastern US and Gulf Ports, Threatening Economy

How the Dockworkers’ Strike Could Ripple Through the Economy

Boeing Weighs Raising at Least $10 Billion Selling Stock

Amtrak’s New Marketing Strategy: It’s Not a Train, It’s a Hotel on Wheels

CVS Conducting Strategic Review, Considering Breakup

Empty Rentals Burn Vacation-Home Owners Near Florida’s Disney World

For Happiest Baby, Maker of $1,700 Bassinet, Growth Comes at Cost of Angry Parents

How Chicken Tenders Conquered America

LVMH Bets on Booze-Free Bubbles at $100-Plus a Bottle

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Morning News: September 30, 2024
Posted by Eddy Elfenbein on September 30th, 2024 at 7:04 am

Libya Assembly Paves Way to Oil Restart With Central Banker Vote

The Disconnect in Metals Markets Cannot Go On

U.S. Ramps Up Hunt for Uranium to End Reliance on Russia

U.S. Approves Billions in Aid to Restart Michigan Nuclear Plant

How the US Lost the Solar Power Race to China

China Has Broken the ‘Critical Minerals’ Market

Xi Has Finally Realized What’s Ailing China

China Removes Curbs on Home Buyers, Sparking Stock Market Surge

FOMO Grips China Stock Buyers on ‘Epic’ Trading Day Before Break

88-Year-Old Japanese Ex-Pet-Shop Owner Built a $14 Million Fortune Buying Stocks

Japan Industrial Output Fell More Than Expected in August

New Swiss Central Bank Chief Takes Charge in Shadow of Credit Suisse Trauma

US Economy Gets Another Big Revision and This Time It’s Good

JPMorgan’s ‘Jamie Premium’ To Be Tested as CEO Succession Looms

Biden’s Antitrust Cop Got a Big Win. Will It Be His Last?

DirecTV and Dish to Merge to Create Largest US Pay-TV Provider

Qualcomm’s Chips Are the Stars of the New Windows AI PCs

Military Veterans Help Plug Worker Shortages at EV, Battery Plants Sprouting Up in the US

Dockworkers Strike Could Begin Tuesday, With Talks at an Impasse

The Great €3 Billion Shipping Container Heist

Jeep Maker Stellantis Warns on Profit as Automakers Face Perfect Storm

Harvard’s Not-So-Smart Money: Two Decades of Poor Returns and Rich Pay

CNN Wades Back Into the Documentary Business

Wall Street Bets on $8.5 Billion Fashion Deal’s Fate in Trial

Vintage Shopping Is Booming. Banana Republic and Others Get In on the Action

The $1,000 ‘Micro’ Handbags Luxury Brands Are Pinning Their Hopes On

Aperol Sales Pop in Summer. Its Owner Wants That to Happen All Year

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Morning News: September 27, 2024
Posted by Eddy Elfenbein on September 27th, 2024 at 7:02 am

‘Asian NATO’ Backer Ishiba to Become Japan PM as Race Jolts Yen

China’s Market Marred by Glitches as Frenzy Grips Stocks

Thailand’s Pension Fund Earmarks $11.6 Billion for Global Investment Overhaul

Ghana Cuts Rate by Most in Six Years With Inflation Seen Easing

Lower Interest Rates Don’t Guarantee a Soft Landing

Biden’s Economic Record Beats Trump’s, With Some Caveats

Why a President Cannot Whip Inflation

The Tech Bro Style in American Politics

5 Days With Elon Musk on X: Deepfakes, Falsehoods and Lots of Memes

Russia’s Crypto Mining Tycoon Builds Fortune From Putin’s U-Turn

Sports Betting Apps Are Even More Toxic Than You Thought

Arm Is Rebuffed by Intel After Inquiring About Buying Product Unit

Amazon’s $4 Billion Anthropic Deal Cleared by UK Watchdog

Europe Can’t Seem to Kick Its Russian Energy Habit

EU Aims to Block Chinese Hydrogen Tech in New Auction Guidelines

Brazil’s Oil Capital Gets a Paradoxical Vote of Confidence

The Carbon Market’s Last Hurdle

Nuclear Power Is the New A.I. Trade. What Could Possibly Go Wrong?

The Energy Boss Overhauling the Grid for AI and Net Zero

A High-Profile Clean-Energy Startup Is Running Short on Cash

The Race to Save America One Seed at a Time

Port Operators Ask Regulator to Force Dockworkers to Negotiate

U.S. Safety Officials Urge Boeing, FAA to Address 737 Rudder System

Stellantis Keeps Slashing in Spite of Signs It Has Cut Too Deep

Forvia Cuts Sales, Margin Outlook on Market Uncertainty

LVMH Expands Industry Influence With Investment in Moncler

H&M to Miss Margin Target as Higher Costs Hurt Earnings

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Morning News: September 26, 2024
Posted by Eddy Elfenbein on September 26th, 2024 at 7:06 am

China’s Politburo Supercharges Stimulus With Housing, Rates Vows

China Weighs $142 Billion Capital Injection Into Top Banks

World Bank Seeks LGBTQ Compromise to End Loan Freeze in Uganda

Swiss Central Bank Delivers Third Straight Rate Cut

Yellen to Call for More Financial Stability Work, Thoughtful Regulation

Fed’s Rate Cut Is Jolting Small Businesses to Spend Again

When Will Money-Market Funds Lose Their Allure?

Knowing the Future Won’t Make You Money

Top Bankers Chase a Big Payday by Defecting to Private Credit

Commerzbank to Begin Talks with UniCredit As It Woos Investors with Profit Goals

Trump and Harris Want More Crypto Innovation. Yikes.

Why Do People Like Elon Musk Love Donald Trump? It’s Not Just About Money.

NYC Mayor Eric Adams Indicted After Federal Corruption Probe

Newsmax Defamation Case Over 2020 Election Is Set to Begin

A Green Jobs Program Touted High Wages. Some Trainees Feel Misled

Why Moves by Amazon and Comments by Jamie Dimon Don’t Threaten an End to Remote Work Benefits

Powering AI Leapfrogs Climate Concerns

OpenAI Discusses Giving Altman 7% Stake in For-Profit Shift

Mark Zuckerberg’s AI Vision Makes Metaverse a Slightly Easier Sell

Ubisoft Analysts Vent After Warning Sends Shares to Decade-Low

BASF Slashes Dividend, Plans Portfolio Shake-Up in Strategy Shift

Southwest Airlines Sets $2.5 Billion Buyback in Turnaround Plan

Starbucks Removes Howard Schultz’s Beloved Italian Pastry Brand From Many Stores

Diageo Warns of Continued Challenges as Consumers Remain Cautious

What Does Baseball Lose When the A’s Leave Oakland?

H&M to Miss Margin Target as Higher Costs Hurt Earnings

The Addiction to Discounting at Michael Kors Is Exposed in Court

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Morning News: September 25, 2024
Posted by Eddy Elfenbein on September 25th, 2024 at 7:07 am

Milei’s Austerity Ravages a Factory Hub at the End of the World

The Net Zero Overhaul

Bankers Say What They Really Think About Net Zero at Climate Week

The High-Stakes Spat Over How Much Oil the World Really Needs

A Coal Windfall Lays Bare China’s Steel Pain

China and EU Seek Deal to Avert EV Tariffs

China Cuts One-Year Policy Rate by Most Ever in Stimulus Drive

Xi’s Economic Adrenaline Shot Is Only Buying China a Little Time

Global Economy Moves Beyond Inflation Crisis to Stable Growth

France Prepares to Raise Taxes on Businesses and the Rich

Trump’s Low-Tax, High-Tariff Strategy Could Clash With Economic Realities

Inside Harris’s Big Economic Pitch

Mark Zuckerberg Is Done With Politics

US Investigating SAP, Carahsoft for Potential Price-Fixing

US Accuses Visa of Monopolizing Debit Card Swipes

Visa, Google, JetBlue: A Guide to a New Era of Antitrust Action

We Asked a Nobel Prize-Winning Economist How to Fix Fintech

How Americans’ Trust in Big Business Went From Bad to Worse

A College Taps Wall Street Playbook to Rival Ivies on Admissions

Micron’s Results May Reveal an AI Winner Trading at a Discount

Inside Activision and Blizzard’s Corporate Warcraft

US Firms Reaching Out as Biosecure Act Closes in, Piramal Says

Southwest Air’s Lackluster Profit Fuels Pressure to Revamp Business Model

Billionaire’s China Supermarket Deal Causes Swift Wealth Wipeout

Waiting for the Miracle of Church-to-Housing Development

Shein Faces Italian Antitrust Scrutiny Over Environmental Claims

How Hello Kitty Took Over the World

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